Japan's core consumer prices up 0.2% in March, miss expected 0.3% gain, retail sales surprise on upside

Key Points
  • Japan reported CPI, household spending, retail sales and industrial production
  • Core consumer prices a tad weaker than expected, retail sales gain more than seen
Tomohiro Ohsumi | Bloomberg | Getty Images)

Japan's core consumer prices rose 0.2 percent in March from a year earlier, government data showed on Friday.

The core consumer price index (CPI), which includes oil products but excludes fresh food prices, compared with economists' median estimate for a 0.3 percent annual gain.

Stripping away the effect of fresh food and energy, consumer prices fell 0.1 percent in March from a year ago.

Core consumer prices in Tokyo, available a month before the nationwide data, fell 0.1 percent in April from a year earlier, versus a 0.2 percent annual fall seen by analysts in a Reuters poll.

An economist told CNBC that the rise in core CPI was unlikely to change the Bank of Japan's (BOJ) policy.

"Bank of Japan's target is 2 percent and yes, the (CPI) number might be a little high but the current inflation is nowhere near the BOJ's target," Japan Macro Advisors Chief Economist Takuji Okubo said.

"(March CPI) excluding fresh food and energy ... has turned negative for the first time since 2013. So while economic data seems to be doing okay, exports seem to be doing okay, inflation is definitely not going the direction the Bank of Japan wants."

As well, data showed Japanese household spending fell 1.3 percent in March from a year earlier in price-adjusted real terms, government data showed on Friday, compared with the median forecast for a 0.3 percent decline.

And Japan's jobless rate held steady at 2.8 percent in March and the availability of jobs rose to the highest since November 1990, data from the Ministry of Internal Affairs and Communications showed on Friday. The seasonally adjusted unemployment rate compared with economists' median forecast of 2.9 percent.

In a later release, Japanese retail sales rose 2.1 percent in March from a year earlier, government data showed on Friday, compared with a median market forecast for a 1.5 percent increase.

Japan also reported that industrial output fell 2.1 percent in March from the previous month, government data showed on Friday, in a sign of a temporary slowdown in production. The result compared with the median estimate of a 0.8 percent decline in a Reuters poll of economists.

It followed a revised 3.2 percent increase in February, the data from the Ministry of Economy, Trade and Industry showed. Manufacturers surveyed by the ministry expect output to rise 8.9 percent in April and fall 3.7 percent in May.

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